Recent orders on use of land transfer earnings show a central government effort to restrict the local use of these funds (essentially unfunded mandates that will likely cause problems to local finance) in ways that benefit peasants. he PRC state earns large sums each year from land use fees. In 2010 it was 3 trillion RMB. “最新数据显示，2010年，我国国有土地使用权出让金收入逾3万亿元，其中，国有土地使用权出让金收入为28197.7亿元，国有土地收益基金收入为1025.23亿元，新增建设用地土地有偿使用费收入为693.45亿元，农业土地开发资金收入192.55亿元。”

Peasants get only a small fraction of the value of the construction/urban use of their agricultural land. Many are angered, for example in the Chengdu district of Longquanyi, large areas of which sprouted new housing and infrastructure over the past decade, peasants regularly demonstrate in front of party headquarters about this.

According to the Ministry of Finance, Ministry of Education circular Ten percent of the land transfer fees for state-owned land should be used to support rural elementary education. 财政部、教育部日前联合发布《关于从土地出让收益中计提教育资金有关事项的通知》. It seems that other government departments would like to use some of the land transfer money. Some of this money involves state- owned land; some involved collectively-owned village land. Peasants get income from leasing their land — sometimes for urban development, sometimes for commercial farming.

These locally funded central government mandates may well collide with what the local authorities want to use this money for. Land transfer profits (the difference between what the peasants pay and what the developers sell land for are an important source of local government revenue (a local scholar said 30% two years ago in Chengdu).

For example, State Council Circular No. 1 (2011) states that 10% of the land transfer money should be used to support irrigation. (see first attachment. The attached from the August 2011 Issue 31 of Lingdao Juece Xinxi discusses to what extent various provinces and regions actually implemented State Council Order No. 1 on increasing spending for irrigation work. Ten percent of the income on land rental transfers was supposed to be spend on irrigation.

Meanwhile Sichuan Province is working on implementing the December 27, 2010 order on proper management of village lands requires that the 90% of the increased value of after it changes from agricultural to construction use be used in ways to be determined in ways that the peasants agree to voluntarily, in a process they participate in, and in a way that satisfies them.

Here in Chengdu over the past three years a national-level experiment has been underway in which peasants can pool and rent out their contract land without going through local officials. I understand similar experiments have been underway in other areas. I ran across this article on the joint circular from the Ministries of Finance and Education 10% of land transfer for education on the website of the Anhui Province Dept. of Finance http://www.ahcz.gov.cn/portal/czdt/gncj/1312473819292540.htm

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About 高大伟 David Cowhig

Worked 25 years as a US State Department Foreign Service Officer including ten years at US Embassy Beijing and US Consulate General Chengdu and four years as a China Analyst in the Bureau of Intelligence and Research. Before State I translated Japanese and Chinese scientific and technical books and articles into English freelance for six years. Before that I taught English at Tunghai University in Taiwan for three years. And before that I worked two summers on Norwegian farms, milking cows and feeding chickens.